Is Biofuel Production a Major Cause of the World Food Crisis?

The World Bank released its July 2, 2008 report “Double Jeopardy: Responding to High Food and Fuel Prices” during the G8 Hokkaido-Toyako Summit:

“For the first time since 1973, the world is being hit by a combination of record oil and food prices. Such record oil and food prices are a destabilizing element for the global economy because of their potentially severe growth, inflation and distributional effects. In terms of their impact on income distribution, inflation and poverty, high food prices are of greater and more immediate concern than high fuel prices. However, the challenge of crafting appropriate policy responses to the food crisis is made much harder in a context of rising oil prices and ensuing fiscal and balance of payments pressures...

As underscored by G8 Finance Ministers, the high food and energy prices pose a serious challenge to global economic stability and growth, and risk reversing years of progress in many poor countries.”

Benjamin Senauer, PhD, Professor of Applied Economics at the University of Minnesota, wrote in his July 3, 2008 article “The Appetite for Biofuel Starves the Poor,” published in The Guardian:

“Grains are the staple food of most people in the developing world, although which particular cereal depends on the region. We can combine IFPRI's [International Food Policy Research Institute] estimate that biofuels account for 30% of the rise in grain prices and the World Bank president's figure of 100 million more hungry people due to higher food prices. This combination suggests that biofuels are responsible for 30 million more people going hungry in the world. The IFPRI model also allows us to estimate the number of malnourished children less than age five under various conditions. Based on the model there are some 2.4 million more malnourished pre-schoolers in the developing countries in 2008 due to the impact of biofuels. Current research, that I and colleagues are working on, suggests that 390,000 additional children under the age of five will die because of this increase in malnutrition due to biofuels. If current biofuel development trends continue, child deaths will rise to 475,000, almost one-half million by 2010."

Jack Santa-Barbara, PhD, Director of the Sustainable Scale Project, wrote in a Sep. 2007 report for the International Fourm on Globalization titled “The False Promise of Biofuels,” published on www.ifg.org:

“Raising the demand for corn as an agrofuel, thus increasing its price in world markets, creates an advantage for the U.S. which is by far the world’s largest exporter of corn...

But there is a moral issue here as well. Corn is a basic food staple for hundreds of millions of people. Some 2 billion people in the world currently suffer from hunger and even more suffer from nutritional deficits. Hunger is as much a political issue as one of food availability. For the billions of poor even a slight increase in the price of food can have dire consequences. And with an expected increase in the global population over the next few decades, in poorer nations competition between food and agrofuels can only intensify…

The world’s poorest people already spend 50 to 80 percent of their total household income on food. For the many among them who are landless laborers or rural subsistence farmers, large increases in the prices of staple foods mean malnutrition and hunger. Some of them will tumble over the edge of subsistence into outright starvation, and many more will die from a multitude of hunger-related diseases. This is a result of food staples being converted to use as agrofuels.

Ultimately, the choice is between using 450 pounds of corn for food and filling a 25-gallon tank of an SUV with pure ethanol. The 450 pounds of corn (or its equivalent in any number of crops) contains enough calories to feed one person for a year. The crops that would go into two tanks of ethanol per week over a year would therefore feed over 100 people for the year. This bizarre situation is the result of market forces. People with cars (the minority) have more purchasing power than the majority who are living at a subsistence level; therefore, crops for fuel are more valuable for producers than crops for food, as car drivers can pay more for the same crops than the poor. This situation will only worsen as more crops are diverted to fuels and as the global population grows over the next few decades.”

David Pimentel, PhD, Professor Emeritus of Ecology and Evolutionary Biology at Cornell University, wrote in a Feb. 25, 2008 article titled “Corn Can’t Save Us: Debunking the Biofuel Myth,” published in the Kennebec Journal:

“[U]sing food crops, such as corn, to produce ethanol raises major nutritional and ethical concerns. Nearly 60 percent of the people on earth are currently malnourished according to the World Health Organization. Growing crops for fuel squanders land, water, and energy vital for human food production.

The use of corn for ethanol has led to major increases in the price of U.S. beef, chicken, pork, eggs, breads, cereals, and milk -- a boon to agribusiness and bane to consumers. Director General of the U.N. Food & Agriculture Organization Jacques Diouf reports that using 22 pounds of corn to produce one gallon of ethanol is already causing food shortages for the world's poor.

One last set of statistics: The global population stands at 6.6 billion: a quarter--million mouths to feed are added daily. Energy experts report that peak oil production has already been reached. As cheap oil supplies decline, fuel prices will rise, causing food prices to climb too (because maximum agricultural production requires fossil fuel inputs).

As global population soars to 8 or 9 billion toward mid-century, and as we burn more grain as fuel, shortages and production costs could cause grain prices to skyrocket, taking food from the mouths of the world's poorest people.

The science is clear: The use of corn and other biofuels to solve our energy problem is an ethically, economically, and environmentally unworkable sham.”

Eric Holt-Giménez, PhD, Executive Director of the Food First Institute for Food and Development Policy, wrote in his July 6, 2007 article “Food First Backgrounder: Biofuels - Myths of the Agro-fuels Transition,” published on www.foodfirst.org:

“Hunger, said Amartya Sen, results not from scarcity, but poverty. According to the FAO, there is enough food in the world to supply everyone with a daily 3,500-calorie diet of fresh fruit, nuts, vegetables, dairy and meat. Nonetheless, because they are poor, 824 million people continue to go hungry. In 2000, world leaders promised to halve the proportion of hungry people living in extreme poverty by 2015. Little progress has been made. The world's poorest people already spend 50-80% of their total household income on food...

With every one percent rise in the cost of food, 16 million people are made food insecure. If current trends continue, some 1.2 billion people could be chronically hungry by 2025—600 million more than previously predicted. World food aid will not likely come to the rescue because surpluses will go into our gas tanks. What are urgently needed are massive transfers of food-producing resources to the rural poor; not converting land to fuel production…

Government-subsidies and mandated targets for agro-fuels [industrial scale biofuels] are the perfect answer to this slump in agribusiness profits, growing as oil shrinks, and concentrating market power in the hands of the most powerful players in the food and fuel industries. Like the original Agrarian Transition, the Corporate Agro-fuels Transition will 'enclose the commons' by industrializing the remaining forests and prairies of the world. It will drive the planet’s remaining smallholders, family farmers, and indigenous peoples to the cities. This government-industry collusion has the potential to funnel rural resources to urban centers in the form of fuel, concentrating industrial wealth. But it may push millions of people into poverty and increase starvation-related deaths dramatically.”

Joachim von Braun, PhD, Director General of the International Food Policy Research Institute (IFPRI), stated in his June 12, 2008 testimony to the US Senate Committee on Energy and Natural Resources, “Biofuels, International Food Prices, and the Poor,” published on www.ifpri.org, that:

“Poor people are impacted by biofuels as consumers in food and energy markets, producers of agricultural commodities in small businesses, and workers in labor markets. The increase in agricultural demand and the resulting increase in agricultural prices will affect poor people in different ways. Some poor farmers could gain from this price increase. However, net buyers of food, which represent the majority of poor people, would respond to high food prices with reduced consumption and changed patterns of demand, leading to calorie and nutrition deficiencies…

Food-calorie consumption will fall the most in Sub-Saharan Africa, where calorie consumption is projected to decrease by more than 8 percent if biofuels expand drastically….

As a result of rising food prices, cuts will likely be made to food expenditures, exacerbating diet quality and micronutrient malnutrition. A study of the effects in an East Asian setting suggests that a 50-percent increase in the price of food, holding income constant, will lead to the decline of iron intake by 30 percent. As a result, the prevalence of micronutrient deficiency among women and children will increase by 25 percent (Bouis 2008)."

Ed Schafer, MBA, US Secretary of Agriculture, made the following statement during his June 3, 2008 remarks at the UN Food and Agriculture Organization High-Level Conference on World Food Security:

“Food security is an international issue that demands an international response. We see the current price crisis playing out in streets and homes around the world, and it demands our swift action…

The United States is deeply concerned by the current crisis. The United States has a long history of working closely with our international partners to support the vulnerable and save lives…

Many concerns have been expressed about the impact of biofuels on food security.

However, increased biofuels production is but one of many contributing factors to increased food prices.

The use of sustainable biofuels can increase energy security, foster economic development especially in rural areas, and reduce greenhouse gas emissions without weighing heavily on food prices.

The U.S. continues to lead on this issue. A recently passed law requires that we minimize possible food security and environmental concerns, in part through significant investment in next-generation biofuel technologies that do not rely on grains and oilseeds used for food or feed.”

Luiz Inácio Lula da Silva, President of Brazil, made the following remarks during his Apr. 16, 2008 speech at the Food and Agriculture Organization of the United Nations’ (FAO) Thirtieth Regional Conference for Latin America and the Caribbean:

"The so-called world food crisis is above all a crisis of opportunity and distribution. Each day 854 million men, women and children sleep in hunger. That is intolerable to us all…

The inability of many countries to produce their own food is the result of decades, if not centuries, of distortions in international trade of agricultural products. Protectionism is a burden. Equally burdensome are the subsidies to agriculture of the rich which undermine the competitiveness of the small farmer…

Brazil has also focused on the enormous potential of biofuels, as an instrument of economic and social change in the poorest countries…

It is therefore with growing concern that I see attempts to create a relationship of cause and effect between development of biofuels and shortage of food or increase in food prices…

Biofuels are not the villain that is threatening the food security of the poorest nations. On the contrary, if developed with care and in accordance with the reality of each country, they can act as a crucial instrument for generating income and lifting countries out of food and energy insecurity."

Edward P. Lazear, PhD, Chairman of the Council of Economic Advisers, stated in his May 14, 2008 testimony Before the Senate Foreign Relations Committee Hearing on "Responding to the Global Food Crisis":

"Global food inflation was 43% during the 12 months ending in March, 2008.While this rate is high, it is not unprecedented. Similar rates were seen in the mid-70s and other periods have experienced high world food-price inflation. But that makes the current situation no less difficult…

I recognize the contribution of biofuel production to recent food-price increases is a topic of particular interest to the Committee. The bottom line is that ethanol production is a significant contributor to increases in corn prices, but neither U.S. nor worldwide biofuel production can account for much of the rise in food prices.

Among the existing stock of biofuels, ethanol is by far the largest type, with corn-based ethanol accounting for a substantial portion of total ethanol. Corn-based ethanol production has increased dramatically over the past year with approximately 25% of total U.S. corn production dedicated to ethanol production in 2007.We estimate that the increase in U.S. corn-based ethanol production accounts for approximately 7.5 percentage points of the 37% increase in corn prices over the past twelve months. The increase in corn-based ethanol production in the rest of the world this past year accounts for as much as an additional 5.5 percentage points. Combining the increases in ethanol production in the U.S. and the rest of the world, we estimate that the total global increase in corn-based ethanol production accounts for about 13 percentage points of the 37% increase in corn prices, or about one-third of the increase in corn prices over the past year.

Let me put this in context. Because corn only represents a small fraction of the IMF Global Food Index, we estimate that the increase in total corn-based ethanol production has pushed up global food prices by about 1.2 percentage points of the 43% increase in global food prices, or about 3% of the increase over the past twelve months.”

"[E]thanol consumes just 4% of world grain (corn, rice, wheat, soy, etc.). Common sense suggests that food-crop derived biofuels would [play] a similarly small role in overall grain prices...

While I worry that the current mud-fight over food vs. fuel will lead to dangerously blunt policies that would throw out the biofuels baby with the bath water, I worry more that the mud-fight will distract us from doing something serious about world hunger. The argument that we should address the starvation being caused by current high prices through minimizing the production of biofuels from food crops is wrong and distracts us from the real solutions. This argument is basically calling for addressing world hunger by encouraging overproduction here in the U.S. (Less corn ethanol means more supply, more supply means lower prices -- or so the argument goes.) But overproduction in developed countries comes at a high cost to our environment, to farmers around the world, and ultimately to the economies of the countries with the most hungry. Overproduction is what we’ve had for decades, and it has crushed farmers in developing countries around the world. Subsidized overproduction and the resulting cheap food does trickle down to feed more people, but it’s not sustainable -- nor is it the most effective way to feed the poor…

U.S. consumption of meat and oil are ultimately the biggest culprits here. The idea that changing our biofuels policy is the only thing the most affluent country on earth can do to make sure the poorest have enough food is just an abdication of responsibility.”

The National Corn Growers Association wrote in its Oct. 2008 publication “U.S. Corn Growers: Producing Food & Fuel,” published on www.ncga.com:

"Accelerated growth in corn use for ethanol has led critics to question corn growers’ ability to satisfy demand for both renewable fuels and traditional markets such as livestock and poultry feed, food processing and exports…

Those who say we must prioritize the demands on grain in a ‘food vs. fuel’ scenario are not taking into account the dramatic advances in seed technology, improved agricultural efficiency, innovations in biofuels production and other breakthroughs that are allowing the American farmer to meet the world’s need for food, feed, fuel and other uses…

Even as corn use for ethanol has risen dramatically over the past 10 years, American farmers have continued to be the world’s top exporter of corn—satisfying the demands of foreign customers. Corn exports have stayed steady or expanded slightly…

Most of the corn exported from the United States is used for livestock feed, not human food. In 2006/07, the U.S. sent 33 percent of its corn exports to Japan (primarily for livestock production), while about one-hundredth of one percent (.01%) went to the top ten undernourished countries in the world."